New South Wales Supreme Court CITATION : Michael Edward Norris v Public Trustee of New South Wales & Anor [2008] NSWSC 179 HEARING DATE(S) : 03/03/08, 04/03/08 JURISDICTION : Equity Division JUDGMENT OF : Einstein J EX TEMPORE JUDGMENT DATE : 4 March 2008 DECISION : Claim to provision dismissed CATCHWORDS : Family Provision Act 1982 (NSW) CASES CITED : Lloyd-Williams v Mayfield (2005) 63 NSWLR 1 Michael Edward Norris (Plaintiff) PARTIES : Public Trustee of New South Wales (First Defendant) Shirley Carolyn Norris-Bungate (Second Defendant) FILE NUMBER(S) : SC 3284/07 COUNSEL : Ms E Cohen (Plaintiff) Ms K Welshman (First and Second Defendants) SOLICITORS : Kerrisons The Law Firm (Plaintiff) Thurlow Fisher (First and Second Defendants) IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION Einstein J Tuesday 4 March 2008 ex tempore Revised 5 March 2008 3284/07 Michael Edward Norris v Public Trustee of New South Wales & Anor JUDGMENT The proceedings 1 The plaintiff, Mr Michael Edward Norris seeks an order for his maintenance, education and advancement out of the estate or notional estate of his late father, Mr Edward Victor Norris, who died on 2 October 2006. Mr Norris was the only child of the deceased and his late mother who died on 8 September 2001. 2 The deceased was married at the date of his death to the second defendant, Shirley Carolyn Norris Bungate. They lived at a jointly owned property at Birrong in Sydney. 3 The deceased made his last will and testament on 18 March 2004. Probate of that will was granted to the Public Trustee on 15 December 2006. Terms of the will 4 Pursuant to the deceased's will, the second defendant received the entirety of the deceased's property. Estate assets 5 At the date of death the deceased owned the following assets: St George Account (a/n 161012150) $60.87 St George Account (a/n 041252440) $92,471.46 Commonwealth Investment Bond $6.62 Motor vehicle $2,500 Cancelled motor vehicle insurance $142.65 Centrelink pension $409.00 6 At the date of death the second defendant and the deceased possessed the jointly owned property in McCrossin Avenue, Birrong, [valued, according to a Raine and Horne estimate, which became at Exhibit P10, as at 21 January 2008 in the sum of between $400,000 and $420,000. 7 Since the date of death $6,000 cash and the motor vehicle have been distributed to the second defendant. The net distributable estate, taking into account the first defendant's commission and charges, is shown in the materials before the Court as $78,105.79. Those moneys are now in the Public Trustee's Common Fund. Background to the marriage between the deceased and second defendant 8 The second defendant and the deceased met in January 2002 through the Probis Club. At that time both had been widowed. The second defendant had three sons, Rodney, Gregory and Allen. The second defendant's first husband, Arthur Bungate, had died in 1993. 9 The second defendant and the deceased commenced seeing one another at around Christmas 2003 and the deceased proposed to her. After a few months the second defendant accepted the proposal and on 14 May 2004 the couple was married. No guests were invited to the wedding. 10 At the time the couple met, the second defendant owned a unit in Church Road, Yagoona which she purchased for $158,000 in about 2001 or 2002 after selling her property at Breasley Avenue, Yagoona for $285,000 at around the same time. 11 In or about April 2004, the second defendant sold her unit in Church Road, Yagoona for $151,021.00 and moved into the deceased's property at Highland Street, Guildford. Within the next few months, the deceased sold that property for $460,000.00, and in September 2004 the couple purchased a property at McCrossin Avenue, Birrong for $465,000 as joint tenants. Unusual feature in the case 12 Before proceeding further it is appropriate to identify an unusual feature of the evidence given by the second defendant in the proceedings. The second defendant had extraordinary difficulty in explaining what had happened to large sums of the deceased's as well as her own money which, on her version of the events, had simply gone missing. This question permeated a large section of her cross-examination and the court was left with the clear impression that the second defendant's evidence could not be regarded as reliable, unless verified by contemporaneous documents, as for example banking records and similar. However the banking records and similar the subject of material subpoenas addressed to the second defendant, did not result in production of a number of seemingly important documents which should have been produced had they existed. The problem was exacerbated by the fact that the second defendant repeatedly gave evidence that all of the material documents had been passed by her to her solicitors. This extraordinary state of affairs led to the cross-examination of Ms Haddad, a solicitor who has the carriage of these proceedings on behalf of the second defendant, who gave evidence that to the best of her ability the documents which her client had furnished had been produced to the court, save for a passport, [in which respect only a copy of the passport had been furnished to the court]. Her further evidence was that she took instructions from the second defendant to the effect that she had produced all documents that she had, that is to say everything in her possession. This question of missing documentation is returned to below. Returning to the purchase of McCrossin Avenue 13 The second defendant paid the 5 per cent deposit on the property at McCrossin Avenue, Birrong. There is no issue about this fact, which is borne out by the second defendant's Community First account [which records such a payment in the sum of $23,250 made by cheque on 3 September 2004]. 14 In an attempt to locate the documentary material which might prove the second defendant's case [that the deceased's contribution to the purchase price of McCrossin Avenue was approximately equal to the second defendant's contribution to that purchase price], counsel appearing for the plaintiff carefully took the second defendant through many of the documents which she had produced on subpoena. The second defendant had sworn that, following the sale in April 2004 of the Church Road Property for an amount of $151,021, the net proceeds of sale were deposited into her Community First Credit Union account. Although she was not able to prove this matter, her case is that the entirety of the $151,000 that she had in her Community First Bank Account went to the purchase of the McCrossin Avenue house. Additionally her evidence was that she recalled having had $120,000 in her Westpac account from the sale of her Yagoona property and that she contributed some of that money to the purchase of McCrossin Avenue. 15 Likewise, and although she was not able to prove this, her case was that she had paid for renovations to McCrossin Avenue in an amount of approximately $80,000. Evidence had been given that prior to moving into McCrossin Avenue she and the deceased had to undertake renovations to the property which was extensively renovated in terms of the bathroom, kitchen, front patio, pergola, workshop at the backyard, carport and fitted lights as well as having been painted. 16 The evidence was that whilst married, the deceased and the second defendant operated joint accounts, sharing their money and shared expenses. 17 The deceased died unexpectedly on 2 October 2006, two years after an operation for a lung clot. 18 The second defendant received the deceased's interest in the property at McCrossin Avenue, Birrong by survivorship. The second defendant's position 19 The second defendant is a 64-year-old woman. She lives alone in the matrimonial home she shared with the deceased. She is retired and her only income is the Centrelink age pension. Her evidence was that she receives $265.45 per week from that pension. She also gave evidence of her current weekly expenses said to total $288.25 per week, which if accepted, would show that she has a weekly deficit of $22.80. If accepted, her evidence shows that she has virtually no savings. She has no superannuation. It appears that she has no prospect of additional income. She owns the home at Birrong and the motor vehicle distributed from the estate. Her case was that she suffers from a number of health complaints. The so-called 'missing money' 20 In July 2003, before the deceased began cohabiting with the second defendant, the assets of the deceased included over $200,000 in the National Australia Bank and a property worth $460,000. 21 In October 2006, when the deceased died, his assets included approximately $85,000 in the NAB account and a half share of a property purchased for $465,000 [which as I have said is now valued in the order of between $400,000 and $420,000]. In short, even ignoring falling property values, the amount of his assets had decreased from $660,000 to $317,500 in a period of slightly more than 3 years. 22 One possible explanation for this discrepancy is that the deceased may have purchased the Birrong property out of his own funds, effectively gifting a half share of the property to the second defendant. The second defendant, however, denies that this is the case. She has not suggested any alternative explanation, but claims to be unaware of what may have happened to this money. This presents a high suspicion that the second defendant has not given reliable evidence on the matter. There is a clear concern of the plaintiff that the second defendant has not made full or proper disclosure of all of the cash/other resources which she may be able to draw upon. The ultimate relevance of the missing monies issue 23 As I see it the primary question which has to be initially answered on the instant application is the basic question of whether or not the court is satisfied that the plaintiff has made out a case that provision for him should be made out of the estate [or notional estate or both], having regard to all of the circumstances at the time when an order might be made for his maintenance, education or advancement in life. It is therefore appropriate to presently examine that basal issue. The primary issue Summary of the plaintiff's financial position and circumstances 24 The plaintiff is a married middle-aged man. He has two adult sons from his first marriage and two dependent school-age daughters from his current marriage. He is employed as an engineering manager and his wife is also employed. He owns jointly with his wife a property at Mount Annan worth $450,000. They also own an investment property in Townsville worth $380,000. The Mount Annan property is encumbered by a mortgage. The investment property in Townsville is also mortgaged, but the plaintiff admits that this confers a tax benefit. The plaintiff also has $220,000 in superannuation. 25 The following table makes the position clear: Family Net Income (including rental income): $8,546 per month Family Expenses (including mortgage payments): $7,498.86 per month Income less Expenses $1,047.14 per month Family Assets: Asset Value Debts and Mortgages Net Family Home (Mt Annan) $450,000 $112,000 $338,000 Investment Property (Jamin Lane, Townsville) $380,000 (as per affidavit) $350,400 (as per affidavit) $29,600 Cars $32,000 $32,000 Personal Loan $15,600 - $15,600 Superannuation $274,145 $274,245 TOTAL $384,000 Conclusion 26 The family has an income which exceeds basic expenses by a little over $1000 per month. These expenses do not include discretionary amounts such as clothing and entertainment expenses, children's pocket money or health insurance. 27 The family assets, excluding superannuation, amount to $384,000. The superannuation of the plaintiff and his wife amounts to an additional $274,245. 28 Against this background, the plaintiff's case is that he has a limited working life and need to provide for his two daughters who are now aged only 11 and 13. They are being educated at private schools at a cost of almost $200 per week. The plaintiff owes $114,000 on mortgage and would probably reduce this by less than $30,000 if he sold his investment property (after capital gains tax). He has at least gained some equity in that property. 29 The plaintiff would like to receive provision out of the estate sufficient to allow him to pay out his mortgage and provide him with a fund for contingencies. The plaintiff also wishes to have the family grave plot transferred to him. Other Relevant Circumstances 30 The plaintiff contributed to the assets of the deceased by assisting with household maintenance, building a granny flat and caring for the deceased and his mother. As his detailed evidence disclosed, he enjoyed a close relationship with his father through the whole of his childhood and even when he moved away from their home, he maintained regular contact with both of his parents at least once a week and continued to assist his father with general maintenance around the home, including mowing lawns, gardening, painting and assisting his father in building a sunroom onto the back of the home and subsequently the granny flat at the rear of the property. After the plaintiff's first marriage had failed he moved back to live with the deceased and his mother, being then aged 30. During that time he built the granny flat at the rear of the house which enabled him to continue living in his parents home indefinitely and made it possible for him to build up his finances after having transferred his own home. Following the second marriage, the plaintiff and his wife continued to reside in the granny flat for approximately 5 years before moving to their current residence. During that time he was still continuing to assist the deceased around the house with maintenance duties. During that time his mother's health deteriorated. 31 I accept as reliable the evidence given by the plaintiff that he was not invited to the wedding of his father and the second defendant which occurred without his knowledge. His evidence included the following: 28. The second defendant moved into the family home at Guildford shortly prior to their marriage. After the marriage I started to feel uncomfortable attending at the family home to see my father. I was no longer able to attend at the family home to see my father when I felt like doing so and instead was requested to provide notice of my attendance. I recall on one occasion, I attended at my father's home without providing notice and as there was no one home and I had a key to the home I let myself in to leave a note confirming my attendance. Subsequently, my father contacted me and said to me words to the effect: "Shirley feels uncomfortable about you having come into the home without us not being there. To keep the peace, could you give me back the house key." I did not return the key, and instead destroyed it and put it in the bin. Further, only on one occasion after my father and Shirley were married were myself and my family invited for dinner. The children did not like the meal which had been prepared. The children made their feelings known to Shirley who then appeared to be quite annoyed and made us all feel extremely uncomfortable for the remainder of the evening. 29. I was retrenched from my employment in or about 2002. The first time I met Shirley's son and his wife was when I was mowing the lawns at dad's place when dad was ill at that time. I recall that I was going through difficult times having been retrenched from my employment and I was trying to find alternative employment. 30. After their marriage dad and Shirley were making overtures about selling the house and moving into another house. They said to me words to the effect: "We want to downsize and we are thinking about selling this home and buying a smaller place in either the Southern Highlands, or perhaps either the Bankstown and Guildford areas." I said to dad words to the effect: "I think you should think carefully about making such a move, as developers are currently buying up properties in your area and if you hold onto the property for a while longer you may be able to sell it at a higher price." Dad made no further comment and subsequently I showed dad a number of homes in the area where I lived at Mount Annan in the hope that he might move closer to our family. Ultimately, dad and Shirley moved to Birrong which is in the Bankstown area, where Shirley's family and a number of her friends reside. 31. Following the marriage between the deceased and the second defendant I found it difficult to make contact with dad. One example of this was that if I telephoned the family home, the second defendant, more often than not answered the phone and said words to the effect: "Ted isn't here", or "Ted is asleep". This situation occurred quite regularly before dad died. Although I left messages for dad to return my calls, my calls were never returned and I suspect that my messages were not passed onto him. 32. Shirley had made it quite apparent that I was not welcome at the home. Apart from the occasion which I had previously mentioned, the family and I were never invited for dinner and it was made quite clear to me that I should not drop in at any time to see dad. On those occasions when I did call in unexpectedly, Shirley would not allow me into the house and would greet me at the front door and say words to the effect: "He is asleep at the moment." I recall on Christmas morning 2002, myself and the family dropped in unexpectedly. We were not allowed into the house. Instead we were provided with a cup of tea and cake on the front verandah. As previously arranged by Shirley, no presents were exchanged between myself, my wife and dad and Shirley. As a result of not being made to feel welcome at dad's home, every one to two months I would arrange to meet dad at the RSL or at the Guildford Hotel. 33. On one occasion the second defendant became quite argumentative and abusive and said to me words to the effect "You will never get anything from your father's estate." 34. Subsequently, I challenged dad concerning the threat made by Shirley but dad refused to engage in conversation about the matter. ………. 40. Following my father's death I received from Shirley a number of personal items including a shaving mug, CDs regarding the research into the family tree and 2 travelling rugs. As far as I am aware, all of dad's tools had been disposed of by Shirley Bungate and I have never been informed as to what happened to them. Contrary to dad's written instructions which were provided to me, together with his original Will for safekeeping, that he be buried in the Roman Catholic section of the Rookwood Necropolis alongside my mother, I was most upset to learn that Shirley had made alternative funeral arrangements which included a private interment and an Anglican funeral ceremony in lieu of the Catholic ceremony that my father had requested in accordance with his Catholic faith. I attended the funeral and my father was buried in a funeral plot purchased by Shirley in the Anglican section of the Rookwood Necropolis. 41. I recall on the morning of dad's death on 2 October 2006 I rang the second defendant and said words to her to the effect: "Get some rest and give me a call later concerning the funeral arrangements". 42. At about 7.00pm Shirley rang me back and said to me words to the effect: "My son is looking after the arrangements". I said to her words to the effect: "I would like to be part of the funeral arrangements". Shirley said: "No way". I said: "I got specific instructions from dad as to where and how he is to be buried". Shirley replied words to the effect: "I have arranged for him to be buried in the Anglican Lawn Cemetery at Rookwood where I propose to be buried alongside him when my time comes". I said words to the effect: "Have you got instructions in the Will to that effect?". She said: "What do you want to look at the Will for?". I said: "I just want to know if there are any specific instructions". Although I was invited to provide a eulogy at the funeral which I did, I was precluded from all funeral arrangements and only found out about the funeral arrangements in the paper. 43. After dad's marriage to Shirley, as a result of my limited telephone contact with dad and also as a result of my meetings with him at the RSL I was aware that for a number of years prior to his death dad was in ill health. I recall on one occasion shortly after Shirley and dad had moved into the house at Birrong, I received a telephone call from Shirley who said to me words to the effect: "Your father has had an accident. He has fallen from a ladder and broken his leg." As a result, my father was in and out of hospital for 2 to 4 weeks. During his convalescence and during his period of illness I would ring their home to speak to dad and enquire about his health. Shirley would always answer the phone and say words to the effect: "He is too ill to have visitors" or "He is too tired to have visitors." Consequently, I was unable to visit dad during his periods of illness. Decision on the primary issue 32 Notwithstanding the above described difficulties which the plaintiff's counsel encountered in endeavouring to tie the second defendant down to a far more precise picture of the manner of the expenditure of the funds, [in particular proving her alleged 50% contribution to the purchase of McCrossin Avenue] and notwithstanding the considerable doubts which I have as to the reliability of the evidence given by the second defendant, I have reached the clear conclusion that the plaintiff has not established a right to relief in the form of making of any provision under the Act. The family assets excluding superannuation amount to $384,000. The superannuation of the plaintiff and his wife amounts to an additional $274,245. Whilst it is unnecessary for an applicant to demonstrate penury, and the whole of the relevant circumstances require to be carefully weighed, the plaintiff has simply not established the basic matter required to be established in order to obtain any provision: cf Lloyd-Williams v Mayfield (2005) 63 NSWLR 1 at 30 per Bryson JA as to the width of the range of matters the Court may take into consideration. 33 At the end of the day the issue of whether the second defendant did or did not provide one half of the purchase price of the Birrong property is not determinative of the proceedings. The appropriate inference is that outside of the $23,000 deposit which she paid, some real further contribution was likely made by the second defendant. However, regardless of the amount of the contribution, the second defendant clearly had a well-founded expectation in relation to succeeding as the sole beneficiary of the Birrong property should her late husband pre-decease her [being a reasonable expectation following his having acquiesced in the purchase being a joint tenancy]. Weighed in the light of the plaintiff's overall and general financial position, this expectation would have meant a court refusal to designate one half of the Birrong property as notional estate, regardless of the precise amount of the contribution: cf Act S 28(1) (a). 34 For those reasons, the plaintiff has failed to satisfy the Court of an entitlement to provision under the Act. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. 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